CUSTOM PKG FOR AC114
27th Edition
ISBN: 9781337781923
Author: WARREN
Publisher: CENGAGE L
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Chapter 20, Problem 20.23EX
To determine
Lean Manufacturing
The main objective of lean manufacturing is to yield products with high quality, low cost, and immediate availability. In attempting to achieve this objective many producers have applied lean manufacturing.
To Explain: The way in which the managers would be responded.
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The following are some quotes provided by a number of managers at Hawkeye Machining Company regarding the company’s planned move toward a lean manufacturing system: Director of Sales: I’m afraid we’ll miss some sales if we don’t keep a large stock of items on hand just in case demand increases. It only makes sense to me to keep large inventories in order to ensure product availability for our customers.Director of Purchasing: I’m very concerned about moving to a lean system for materials. What would happen if one of our suppliers were unable to make a shipment? A supplier could fall behind in production or have a quality problem. Without some safety stock in our materials, our whole plant would shut down.Director of Manufacturing: If we go to lean manufacturing, I think our factory output will drop. We need in-process inventory in order to “smooth out” the inevitable problems that occur during manufacturing. For example, if a machine that is used to process a product breaks down, it…
Hurney Corporation manufactures plastic water bottles. It plans to grow by producing high-quality water bottles at a low cost that are delivered in a timely manner. There are a number of other manufacturers who produce similar water bottles. Hurney believes that continuously improving its manufacturing processes and having satisfied employees are critical to implementing its strategy.
Required:
Is Hurney's strategy one of product differentiation or cost leadership? Explain briefly.
Identify at least one key element that you would expect to see included in the balanced scorecard
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b. for the customer perspective.
c. for the internal business process perspective.
d. for the learning and growth perspective.
Lean Principles
The chief executive officer (CEO) of Cobalt Inc. just read an article written by a business professor at Harvard University describing the benefits of the lean philosophy. The CEO issued the following statement after reading the article:
This company will become a lean manufacturing company. Presently, we have too much inventory. To become lean, we need to eliminate the excess inventory. Therefore, I want all employees to begin reducing inventories until we make products “just-in-time. ” Thank you for your cooperation.
a. Lean manufacturing is ____. Identify the statement that suits the above situation.
A philosophy that focuses on reducing time, cost, poor quality and uncertainty from a process.
An inventory reduction method.
Producing based on the sales.
Improving productivity ignoring the quality and other aspects.
b. A CEO of a company suddenly commands that the company will become lean manufacturing company due to increased inventory. Identify the statement…
Chapter 20 Solutions
CUSTOM PKG FOR AC114
Ch. 20 - Which type of cost system, process or job order,...Ch. 20 - In job order cost accounting, the three elements...Ch. 20 - Prob. 3DQCh. 20 - Why is the cost per equivalent unit often...Ch. 20 - What is the purpose for determining the cost per...Ch. 20 - Rameriz Company is a process manufacturer with two...Ch. 20 - What is the most important purpose of the cost of...Ch. 20 - Prob. 8DQCh. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Job order versus process costing Which of the...Ch. 20 - Job order versus process costing Which of the...Ch. 20 - Units to be assigned costs Eve Cosmetics Company...Ch. 20 - Units to be assigned costs Keystone Steel Company...Ch. 20 - Equivalent units of materials cost The Filling...Ch. 20 - Equivalent units of materials cost The Rolling...Ch. 20 - Equivalent units of conversion costs The Filling...Ch. 20 - Equivalent units of conversion costs The Rolling...Ch. 20 - Cost per equivalent unit The cost of direct...Ch. 20 - Cost per equivalent unit The cast of direct...Ch. 20 - Cost of units transferred out and ending work in...Ch. 20 - Cost of units transferred out and ending work in...Ch. 20 - Process cost journal entries The cost of materials...Ch. 20 - Process cost journal entries The cost of materials...Ch. 20 - Using process costs for decision making The costs...Ch. 20 - Using process costs for decision making The costs...Ch. 20 - Entries for materials cost flows in a process cost...Ch. 20 - Flowchart of accounts related to service and...Ch. 20 - Entries for flow of factory costs for process cost...Ch. 20 - Factory overhead rate, entry for applying factory...Ch. 20 - Equivalent units of production The Converting...Ch. 20 - Equivalent units of production Units of production...Ch. 20 - Equivalent units of production The following...Ch. 20 - Costs per equivalent unit a. Based on the data in...Ch. 20 - Equivalent units of production Kellogg Company...Ch. 20 - Costs per equivalent unit Georgia Products Inc....Ch. 20 - Equivalent units of production and related costs...Ch. 20 - Cost of units completed and in process a. Based on...Ch. 20 - Errors in equivalent unit computation Napco...Ch. 20 - Cost per equivalent unit The following information...Ch. 20 - Costs per equivalent unit and production costs...Ch. 20 - Cost of production report The debits to Work in...Ch. 20 - Cost of production report The Culling Department...Ch. 20 - Cost of production and journal entries AccuBlade...Ch. 20 - Cost of production and journal entries Lighthouse...Ch. 20 - Process costing for a service company Madison...Ch. 20 - Decision making Mystic Bottling Company bottles...Ch. 20 - Decision making Fix Paper Inc. produces...Ch. 20 - Prob. 20.23EXCh. 20 - Equivalent units of production: average cost...Ch. 20 - Equivalent units of production: average cost...Ch. 20 - Equivalent units of production: average cost...Ch. 20 - Equivalent units of production and related costs...Ch. 20 - Cost per equivalent unit: average cost method The...Ch. 20 - Cost of production report: average cost method The...Ch. 20 - Cost of production report: average cost method...Ch. 20 - Entries for process cost system Pori Ormond Carpel...Ch. 20 - Cost of production report Arabica Highland Coffee...Ch. 20 - Equivalent units and related costs; cost of...Ch. 20 - Work in process account data for two months; cost...Ch. 20 - Cost of production report: average cost method...Ch. 20 - Entries for process cost system Preston Grover...Ch. 20 - Cost of production report Bavarian Chocolate...Ch. 20 - Equivalent units and related costs; cost of...Ch. 20 - Work in process account data for two months; cost...Ch. 20 - Cost of production report: average cost method...Ch. 20 - Ethics in Action Assume that you are the division...Ch. 20 - Communication Jamarcus Bradshaw, plant, manager of...Ch. 20 - Accounting for materials costs In papermaking...Ch. 20 - Analyzing unit costs Midstate Containers Inc....
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- The chief executive officer (CEO) of Cobalt Inc. just read an article written by a business professor at Harvard University describing the benefits of the lean philosophy. The CEO issued the following statement after reading the article: This company will become a lean manufacturing company. Presently, we have too much inventory. To become lean, we need to eliminate the excess inventory. Therefore, I want all employees to begin reducing inventories until we make products “just in time. ” Thank you for your cooperation. How would you respond to the CEO’s statement?arrow_forward1. Lean Principles The chief executive officer (CEO) of Platnum Inc. has just returned from a management seminar describing the benefits of the lean philosophy. The CEO issued the following statement after returning from the conference: This company will become a lean manufacturing company. Presently, we have too much inventory. To become lean, we need to eliminate the excess inventory. 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He suggested a more careful assessment of the proposed designs effect on activities other than machining. Based on this suggestion, the following revised cost formula was developed. This cost formula reflected the cost relationships of the most recent design (Design Z). Y=140,000+8X1+5,000X2+2,000X3 where X1=MachinehoursX2=NumberofbatchesX3=Numberofengineeringchangeorders Based on scheduling and inventory considerations, the product would be produced in batches of 1,000; thus, 25 batches would be needed over the products life cycle. Furthermore, based on past experience, the product would likely generate about 20 engineering change orders. This new insight into the linkage of the product with its underlying activities led to a different design (Design W). This second design also lowered the unit-level cost by 2 per unit but decreased the number of design support requirements from 20 orders to 10 orders. 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